Ashmore first half profit, assets under management drop

Specialist emerging markets asset manager Ashmore posted a drop in first half pre-tax profit as assets under management declined, with weak oil prices and worries about a slowdown in China denting investor sentiment.

Assets under management fell to $49.4bn at the end of December from $58.9bn at the end of June, while pre-tax profit dropped to £62.7m in the six months to 31 December, from £110.7m in the same period a year ago.

Net revenue fell 29% to £116.4m, while diluted earnings per share came in at 6.5p, and the company maintained its interim dividend at 4.55p.

RBC Capital Markets was expecting revenue of £113.6m, while consensus was for £109.5m.

EPS was weaker than expected, however, with RBC estimating 7.1p and consensus of 7.2p.

Chief executive officer Mark Coombs said: “Notwithstanding the effects that weaker markets and sentiment have had on AuM levels, Ashmore's inherently flexible cost base has delivered good cash generation and enabled the profit margin to be maintained at a high level in the first half of the financial year.

“Markets have remained volatile in early 2016, and while this can provide great value-based investment opportunities, sentiment is likely to continue to be affected by the lower oil price and ongoing concerns about slowing global growth, particularly with respect to China.”

Ashmore said it demonstrated cost flexibility, reducing operating costs over the period by 16% to £46.3m.

“While we applaud the reduction in the cost base, it was not as much as we hoped,” said RBC.

At 0818 GMT, Ashmore shares were down 5.2% to 200.30p.